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Checks on illegal immigrants’ bank accounts are necessary

01.10.2017

LONDON, UK (Centus) - It has been a year since the EU Referendum result, with immigration being one of the primary factors that caused thousands of people to vote for Brexit. Until Britain has formally left the European Union, which will be delayed until 2021 now, there is not much the Government can do to tackle European immigration. In relation to the banking and payments industries, that has not stopped the Home Office from implementing new measures that will make it very difficult for illegal immigrants to open a new bank account in the United Kingdom.

This is an excellent proposal in theory as it chimes with the Government’s theme since the Brexit vote that immigration needs to be monitored properly, whilst preventing illegal immigrants from taking advantage of their status in the United Kingdom to open fraudulent accounts. Even though the system was introduced in 2014 and then approved by Parliament in December 2016, it has only recently been put into practice and shows that Westminster is aware of the challenges the banking and payments industries face in trying to police this problem. This new law was put into effect not long after the EU Referendum. Therefore, its implementation has been perfectly timed. These immigration measures would result in the banking and payments industries’ security being radically improved. However, that does not mean this legislation has faced practical problems.

The Home Office has made many mistakes since it legislated the “hostile environment” measures against illegal immigrants. Their records reveal that one in ten people were refused a new account because they failed an immigration status check, yet this was due to errors at the Home Office as opposed to accurately checking whether they were eligible to remain in Britain. A sample of 169 cases investigated by inspectors found that 17 people should never have been disqualified because they had the legal right to reside in this country. David Bolt, the Chief Inspector of Borders, also discovered that 250 driving licenses had been wrongly revoked after the Home Office made wrong decisions about people who were in the United Kingdom illegally.

Former TSB board member, Philip Auger, warned that mistakes will be made along the way when all banks and building societies begin checks on 70 million current account holders who hold immigration status from January 2018. Liberal Democrat Brexit spokesperson, Tom Brake MP, said this is another example of how the Conservatives are demonising immigrants. That is simply not true. It is about tightening the rules.

Many new systems are bound to experience teething problems when they are introduced. Considering recent criticism, the Home Office has defended the scheme, saying that it is only fair to check to see if people are living in the United Kingdom legally, but firm with those who break the rules, whilst ensuring everybody can play their part in tackling illegal immigration. They were quick to reiterate that those who are here legally will not be affected, even though many of them have been. As Mr. Auger said, civil servants hardly have a flawless record of execution and there are bound to be some poor individuals whose lives will be impacted in the short-term.

Despite the attacks many of those opposed to the new system have made, it is not unreasonable to expect banks to play a leading role in society to prevent those who are here illegally from opening bank accounts under the names of established banking institutions. These checks will be carried out every three months on all current accounts in the United Kingdom against a database of customers provided by the Home Office. They will be required to close the accounts of those whose names are identified as disqualified persons on a database operated by Cifas, an anti-fraud organisation that possesses the Home Office’s data.

These measures are fair to those who can prove that they have a legal right to remain in Britain. A complaints procedure has been introduced by the Home Office to ensure that those who feel unfairly discriminated by Cifas can appeal against the anti-fraud organisation’s decision to close the bank account of that legal citizen. This is not about demonising immigrants, as Mr. Brake MP was quick to suggest. The Liberal Democrats’ Brexit spokesperson reiterated that immigrants have contributed a substantial amount to British society, which they have and will continue to do so once Britain has left the European Union. This is about stopping illegal immigrants from opening bank accounts and storing money when they have not yet obtained full British citizenship. It is a common-sense policy to stop them from taking advantage of this country’s hospitality to all.

This is not the first legislation of its kind to prevent illegal immigrants from opening bank accounts. The new rules will go much further and trace back accounts that were opened prior to the 2014 Immigration Act. They will also apply to those who have overstayed their visas. The Government will be able to apply, without notice, for a court order to freeze the accounts of migrants found to be in Britain illegally. There are exceptions for joint accounts or enabling a person to access monies to cover living expenses and legal costs to appeal the decision. The Home Office will provide banks with the power to close all illegal accounts, except those which are already overdrawn or shared with those who would be negatively impacted by a closure.

When these new rules are enforced from January 2018, there are bound to be more problems as there have been already. As the case of Nilesh Sheth, a personal banking manager at Barclays who assisted a gang of foreign criminals with opening 400 illegal bank accounts to shuffle stolen funds to criminals in Eastern Europe, demonstrates, there is so much the Government could continue to do to ensure Britain’s banking and payments systems are not exploited. At a time when technology is becoming increasingly sophisticated and criminals inventive with money laundering, it is about time that legislation such as this was made a reality.

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Matthew Snape is a journalist for Centus UK and specialises in topics relating to the EU and UK economy, politics and payments industry. Matthew is also in the middle of completing the National College for the Training of Journalists qualification.